A portability election by the estate of a first spouse to die allows the unused unified credit of the first spouse to be used by the surviving spouse for estate and gift tax purposes. Since Code §2010(c)(5)(A) requires the election be made on an estate tax return, the portability election is effective only if made on an estate tax return that is timely filed (including extensions).

Because of numerous requests for extensions of the timing period, and the administrative burden placed on the IRS, the IRS has issued a Revenue Procedure to allow for the filing of a late portability election. The key provisions of this extension are: . .

Several years ago I prepared a table to assist practitioners in determining what restrictions apply on a transfer of homestead property at death or during lifetime. You can access it here.

Homestead status has other implications, including protections from creditors, inclusion or exclusion from the probate estate, and ad valorem tax implications. The Florida Statutes also employ the term “protected homestead” in defining some of these aspects. The whole area makes for a set of interrelated and unrelated concepts and implications that is difficult to both comprehend and apply.

A husband died in 2012, and his estate filed a gift tax return to report a deceased spousal unused exclusion (DSUE) and elected portability. The IRS sent a letter to husband’s estate accepting the estate tax return as filed. Portability allows a surviving spouse or the estate of that surviving spouse to use the unused unified credit of the predeceased spouse for estate and gift tax purposes.

His wife died in 2013. Her estate filed an estate tax return that applied the husband’s DSUE amount to reduce her estate taxes. Notwithstanding any period of limitation in section 6501, after the time has expired under section 6501 within which a tax may be assessed under chapter 11 or 12 with respect to a deceased spousal unused exclusion amount, the Secretary may examine a return of the deceased spouse to make determinations with respect to such amount for purposes of carrying out this subsection.

Hurricane Irma blazed a path of destruction through the Caribbean, the Florida Keys, and up through Florida. As a result, the IRS is postponing various tax filing and payment deadlines that occurred starting on September 4, 2017 in Florida and September 5, 2017 in Puerto Rico and the Virgin Islands. Persons with valid filing extensions in place will have their due dates extended until January 31, 2018. Extended deadlines include due dates for income tax returns for individuals and entities due on September 15 and October 16. . .

In June, the IRS reissued proposed regulations that adopt new centralized partnership audit procedures. These will replace the current TEFRA audit rules.

The short story is that by default, the PARTNERSHIP is responsible for paying any additions to tax, although the partnership can elect to push this out to the partners. The new rules also replace the “tax matters partner” with a “partnership representative” – this representative. . .

In a recent speech, President Trump did not provide much detail in regard to the tax reform proposals that are expected soon, or his particular desires. Nonetheless, he did drop hints as to some aspects of reform: